https://www.wsj.com/articles/3-growth-if-we-can-keep-it-1540595205
Can economic growth from tax reform and deregulation stand up to the headwinds from higher interest rates, tariffs and perhaps a Democratic Congress? That’s the question we take away from Friday’s strong but somewhat disappointing report on economic growth in the third quarter. The answer isn’t obvious.
The Commerce Department reported that the economy grew at a robust 3.5% in the third quarter, a mild slowdown from 4.2% in the second. Consumer spending led the way with a 4% increase rooted in a tight job market and wage gains that have bolstered economic confidence. The economy has now grown by 3% over the last 12 months.
The U.S. economy hasn’t grown at 3% in a calendar year since 2005, and that is now achievable this year. Barack Obama has recently been claiming credit for this faster growth as he campaigns for Democrats, but that boast is right up there with his promise that if you like your health plan you can keep it.
It’s clear that the Republican policy mix of tax reform, deregulation and general encouragement for risk-taking rescued an expansion that was fading fast and almost fell into recession in the last six quarters of the Obama Administration. The nearby chart tells the story that Mr. Obama and his economists won’t admit. Soaring business and consumer confidence have been central to this rebound.